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TSMC sees growth slowing in 2019
Source: DIGITIMES   Editor: Amanda   Update Time :2019/1/18 16:20:06

TSMC has described 2019 as "a slow year" for the world's largest pure-play foundry and also the overall semiconductor market.

TSMC expects to post a 1-3% revenue increase in 2019, when the global foundry IC market will register only flat growth. The pure-play foundry also forecast the overall semiconductor market excluding memory will grow by a mere 1% this year.

TSMC's first-quarter revenues are estimated at between US$7.3 billion and US$7.4 billion, down about 14% from US$8.46 billion during the same period in 2018. The guidance also represents an around 22% sequential decline compared to the prior quarter.

Falling capacity utilization rates will drag down TSMC's gross margin and operating margin on both sequential and on-year bases in the first quarter of 2019, the foundry said. Market observers identified its falling 7nm process utilization rate as the major cause.

TSMC attributed its dim outlook this year to macroeconomic uncertainty, and disappointing high-end smartphone sales that have led to inventory pile-ups in the semiconductor supply chain. The supply chain will be engaged in inventory adjustments through the middle of 2019, according to the foundry.

TSMC expects to see sales generated from the IoT device segment register a double-digit increase this year, with the growth outperforming growth in sales from other sectors. The foundry's sales generated from the high-performance computing (HPC) segment will likely suffer a double-digit fall in 2019. Excluding cryptocurrency mining chips, sales from the HPC segment would generate slight growth.

TSMC's sales generated from the handset sector are expected to register another slight increase in 2019, while those from the automotive electronics segment will post flat growth, according to the foundry.

In addition, TSMC estimated capex this year at between US$10 billion and US$11 billion. The foundry originally set its capex target at US$10-12 billion.

Of its 2019 capex, 80% will be spent on the foundry's 7nm, 5nm and 3nm process technologies, the foundry disclosed. Despite its gloomy business outlook, TSMC is confident about the competitiveness of its 7nm node manufacturing.

TSMC saw its 7nm chip shipments account for 9% of company wafer revenues in 2018. The proportion will reach 25% in 2019, according to the foundry.

TSMC also expressed optimism about its advanced IC backend business this year, which is forecast to enjoy a double-digit sales increase compared to 2018.

TSMC remains optimistic about its performance in 2020 and 2021, when 5G and other emerging technologies mature. TSMC will keep its technology leadership with competitive 7nm and more advanced process nodes, the foundry said.

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